The Demographic transition model (DTM) is a model used to explain the process of shift from high birth rates and high death rates to low birth rates and low death rates as part of the economic development of a country from a pre-industrial to an industrialized economy. It is based on an interpretation begun in 1929 by the
American demographer Warren Thompson[1] of prior observed changes, or transitions, in birth and death rates in industrialized societies over the past two hundred years.

In pre-industrial society, death rates and birth rates were both high and fluctuated rapidly according to natural events, such as drought and disease, to produce a relatively constant and young population. Children contributed to the economy of the household from an early age by carrying water, firewood, and messages, caring for younger siblings, sweeping, washing dishes, preparing food, and doing some work in the fields.[4]

Raising a child cost little more than feeding him: there were no education or entertainment expenses, and in equatorial Africa, there were no clothing expenses either. Thus, the total cost of raising children barely exceeded their contribution to the household. In addition, as they became adults they became a major input into the family business, mainly farming, and were the primary form of insurance in old age. In India an adult son was all that prevented a widow from falling into destitution. While death rates remained high there was no question as to the need for children, even if the means to prevent them had existed.[5]

First, improvements in the food supply brought about by higher yields in agricultural practices and better transportation prevent death due to starvation. Agricultural improvements included crop rotation, selective breeding, and seed drill technology.

Second, significant improvements in public health reduce mortality, particularly in childhood. These are not so much medical breakthroughs (Europe passed through stage two before the advances of the mid-20th century, although there was significant medical progress in the 19th century, such as the development of vaccination) as they are improvements in water supply, sewerage, food handling, and general personal hygiene following from growing scientific knowledge of the causes of disease and the improved education and social status of mothers.

A consequence of the decline in mortality in Stage Two is an increasingly rapid rise in population growth (a "population explosion") as the gap between deaths and births grows wider. Note that this growth is not due to an increase in fertility (or birth rates) but to a decline in deaths. This change in population occurred in northwestern Europe during the 19th century due to the Industrial Revolution. During the second half of the 20th century less-developed countries entered Stage Two, creating the worldwide population explosion that has demographers concerned today.

Another characteristic of Stage Two of the demographic transition is a change in the age structure of the population. In Stage One, the majority of deaths are concentrated in the first 5–10 years of life. Therefore, more than anything else, the decline in death rates in Stage Two entails the increasing survival of children and a growing population. Hence, the age structure of the population becomes increasingly youthful and more of these children enter the reproductive cycle of their lives while
maintaining the high fertility rates of their parents. The bottom of the "age pyramid" widens first, accelerating population growth. The age structure of such a population is illustrated by using an example from the Third World today.

Stage Three

Stage Three moves the population towards stability through a decline in the birth rate.[8] There are several factors contributing to this eventual decline, although some of them remain speculative:

In rural areas continued decline in childhood death means that at some point parents realize they need not require so many children to be born to ensure a comfortable old age. As childhood death continues to fall and incomes increase parents can become increasingly confident that fewer children will suffice to help in family business and care for them in old age.

Increasing urbanization changes the traditional values placed upon fertility and the value of children in rural society. Urban living also raises the cost of dependent children to a family.

In both rural and urban areas, the cost of children to parents is exacerbated by the introduction of compulsory education acts and the increased need to educate children so they can take up a respected position in society. Children are increasingly prohibited under law from working outside the household and make an increasingly limited contribution to the household, as school children are increasingly exempted from the expectation of making a significant contribution to domestic work. Even in equatorial Africa, children now need to be clothed, and may even require school uniforms. Parents begin to consider it a duty to buy children books and toys. Partly due to education and access to family planning, people begin to reassess their need for children and their ability to raise them.[5]

A major factor in reducing birth rates in stage~3 countries such as Malaysia is the availability of family planning facilities, like this one in Kuala Terenganu, Terenganu, Malaysia.

Increasing female literacy and employment lower the uncritical acceptance of childbearing and motherhood as measures of the status of women. Working women have less time to raise children; this is particularly an issue where fathers traditionally make little or no contribution to child-raising, such as southern Europe or Japan. Valuation of women beyond childbearing and motherhood becomes important.

Improvements in contraceptive technology are now a major factor. Fertility decline is caused as much by changes in values about children and sex as by the availability of contraceptives and knowledge of how to use them.

The resulting changes in the age structure of the population include a reduction in the youth dependency ratio and eventually population aging. The population structure becomes less triangular and more
like an elongated balloon. During the period between the decline in youth dependency and rise in old age dependency there is a demographic window of opportunity that can potentially produce economic growth through an increase in the ratio of working age to dependent population; the demographic dividend.

However, unless factors such as those listed above are allowed to work, a society's birth rates may not drop to a low level in due time, which means that the society cannot proceed to Stage Four and is locked in what is called a demographic trap.

This occurs where birth and death rates are both low. Therefore the total population is high and stable.[9] Some theorists consider there are only 4 stages and that the population of a country will remain at this level. The DTM is only a suggestion about the future population levels of a country. It is not a prediction.

The original Demographic Transition model has just four stages, however, some theorists consider that a fifth stage is needed to represent countries that have undergone the economic transition from manufacturing based industries into service and information based industries called deindustrialization. Countries such as United Kingdom (the earliest nation universally recognised as reaching Stage Five), Germany, Italy, Spain, Portugal, Greece, and most notably Japan, whose populations are now reproducing well below their replacement levels, are not producing enough children to replace their parents' generation. China, South Korea, Hong Kong, Singapore, Thailand and Cuba are also below replacement levels, but this is not producing a fall in population yet in these countries, because their populations are relatively young due to strong growth in the recent past.

The population of southern Europe is already falling, and Japan and some of western Europe will soon begin to fall without significant immigration. However, many countries that now have sub-replacement fertility did not reach this stage gradually but rather suddenly as a result of economic crisis brought on by the post-communist transition in the late 1980s and the 1990s. Examples include Russia, Ukraine, and the Baltic States. The population of these countries is falling due to fertility decline, emigration and, particularly in Russia, increased male mortality. The death rate can
also increase due to "diseases of wealth", such as obesity or diabetes, leading to a gradual fall in population in addition to above aging.